That €400 million Europe’s sending to Haiti? A bit decorative with the truth

Governments have a decidedly crafty habit of announcing, reannouncing and announcing once again the same tranche of funding but in different contexts (and even re-announcing the announcements), making it look as though they are being more generous than they really are. There’s even a principle that says that if you haven’t announced the same chunk of cash at least three times in three different ways, you haven’t got the full bang for your public relations buck.

Here, the euphemism of ‘being economical with the truth’ is inverted: when delivering spending announcements, governments are rather too bountiful with the truth.

The European Union’s announcement of over €400 million in emergency assistance to Haiti in the wake of its cataclysmic earthquake is an object lesson in this sort of funding announcement flimflammery – and, equally, how journalists can be unwitting or witting accomplices in this deceit.

Last Monday, after an extraordinary meeting of development ministers from across the EU, newly installed foreign affairs grand poobah Catherine Ashton, foreign minister for Spain (which currently holds the bloc’s six-month rotating presidency) and outgoing development commissioner Karel de Gucht announced that the bloc in total was offering over €400 million for Haiti, from both EU member states and the European Commission. All told, the funds announced on the 18th amounted to €429 million.

But just a cursory interrogation of what makes up this funding reveals that genuinely new cash amounts to, at most €115 million, and could well be much less than that.

The headline figure for emergency aid the commission was hoping journalists would pick up on was, according to John Clancy, development spokesman: ‘by the end of the week, the package of commission money comes to €30 million’. Of this, just €19 million, which was to be dispersed immediately, was genuinely fresh funding. Atop this, €8 million was previously announced funds from the European Community Humanitarian aid Office (ECHO) that was being redirected, and another €3 million that had been announced within 24 hours of the quake.The €3 million at the time was new money, but now was being announced again as part of a larger ‘package’

EU member states also announced €96 million of their own funds for emergency relief (the Council communication originally read €92 million, but a Council press officer told us that this was a misprint and that it actually amounted to €96 million. Some publications have however reported the €92 million figure). According to Catherine Ashton’s spokesman, Lutz Guelllner, most member states committed funds. No one had, or was willing to hand out, a schedule of which member states gave what amount of cash. Guellner told me that he thought that most of this was genuinely new money, but he was not 100 percent sure. The only way to find out would be to call each of the 27 member states’ permanent representations and hope that after hours of work trying to get a hold of the person responsible, I would get the complete picture. There was no time before deadline to do this, so I took Guellner at his word about the €96 million, but this may yet not be the case.

Beyond immediate emergency aid, the commission also announced €107 million for short to mid-term rehabilitation and reconstruction efforts and a further €200 million for long-term reconstruction that would be alloted once the worst of the crisis has past.

This further €307 million however did not represent new money, but cash redirected from existing development funds ‘a lot of which was already programmed for Haiti,’ Clancy told me. ‘Instead of being spent on training teachers, it’ll now be spent on building schools; instead of training nurses, it’ll be used to build clinics.’

Despite all this, almost all news outlets dutifully reported that the EU was giving €400 million, from the Financial Times, the Guardian, Voice of America, to Xinhua – just to give a few examples. With such a volume of papers reporting this, it becomes history.

The same thing has happened with the $100 billion fund within the Copenhagen Accord agreed (outside the legal UN process) at the UN climate summit in December. Every outlet now just refers to this as an established fact, but the reality is that this is a mix of public and private monies. According to a commission spokesperson, the breakdown is understood to be the same as that which lay within a commission proposal on climate finance dating back to September – that is, of this, €22-50 billion would come from the public purse, depending on whether a metric of ability to pay or historic emissions was used to decide how to share out the burden of paying into the fund. Realistically, the lower of the range is the most likely. Of this €22, the EU is committed to ‘paying its fair share’, which is generally understood to amount to about a third of this, with a similar share coming from the US and the rest from other industrialised powers – and even from emerging economies as well. So the real EU commitment would amount to just €7-17 billion a year to pay for adaptation and mitigation. The World Bank has estimated that mitigation alone is likely to cost $400 billion a year by 2030 and adaption $75 billion.

But everywhere it keeps being reported that the rich world is offering a sum of $100 billion a year for climate adaptation and mitigation. This is a whopper of a porky pie that serves specific ends, namely making the rich world look generous at the climate negotiating table and developing world refuseniks as unreasonable.

Ashton at least said that all of the Haiti cash will come in the form of grants rather than loans, with no no economic or political strings attached – ‘as far as I know’.

This is refreshing in comparison to the International Monetary Fund, whose monies of $100 million in emergency cash came in the form of loans via the organisation’s extended credit facility, which will have to be paid back and with conditions that will include hiking electricity prices, public sector wage freezes and keeping a lid on inflation.